tv The Willis Report FOX Business November 12, 2012 9:00pm-10:00pm EST
individuals making over what billion-dollar is. there were great battleground ideas out there but everyone gets behind the talking points and is not tried to move the ball forward. yes we have the spending problem but a president not budging and away to show if we just revenues so slightlyook. in the boom that we get weme. are off to the races. i'm gerri wilis. will busess and abor lleaders pixar nation's fiscal cliff problem? our land back congress. thesgroups heading to washington this week to dscuss possible solutions with president obama. days after the congressional budget office reports there is another threat of reession. lawmakerin washington have just 49 days to strike eal that would prevent more than $600 billion in tax increases and automatic spending cuts. in addition the president has been reelected. obamacare, the president's controversial health care law one of the fully implemented. ceos all across the country are coming out warning of the w's impact on their business. as a result, threatening massive
layoffs. joining me now, former commerce secretary under president george of the bush. great to have you on the show, sir. let's start with this meeting the president is calling with union leaders, business leaders. what can they do that congress cannot? >> well, the problem is that th can't do muc because the brush of taxes ad the rise of regulations that are being thrown at businesses, th only thing they can do is defend themselves from em, but i don't think they can reach in a gramith labor to say that we are not going to a reduced the size of our rkforce even though we are not trying to make profits because of obamacare. everyone is criticizing apple bees, but we forget that the purpose of business is tmake a profit. gerri: and just to make a point here, applebees, the apple bees in new york has aid that they
are not going to expand into new restaurants not going to add people to staff because of obamacare. >>nd you know what, that is just the beginning. gerri: worse things are happening. >> oh, absolutely. i mean, there is oe provision in obamacare where, i people work less than 30 hours th don't have to get helth insurae and the company. we are going t see a load of part-time jobs. i mean, the unintended consequences are such that i don't think we can see the malt. gerri: well, and less talk about. you said that business and unions cannot fix thisproblem. obviously they're not running congresso voting on a budget, voting o how to change spending in this country. but you say that the gop has more levage than many people think. how o? >> well, i thi that, you know, last term i think the president was being very tactical and was looking forward to his second
term to be reelected. he has ben reelected. now he isthinking about his place in history, and i don't think he can afford a legacy whereby he did nothing to avoid another recesion, this fiscal clef, a credit downgrade. i mean, this is going to be a disaster for the country. so i think he has to get something done. he has to compromise. apparently, you know,between the speaker and the president, there have bee statements that flect a sense of compromise. gerri: well, it reflects a sense of compromise. i'm not sure that is reality. i think some of the staments have been misread. one statement that i have seen om senate democrats saying that we need to drive over the fiscal glove because that is the only way we're going to eventually get anything done. on the other hand, people say we will lose 2 million jobs in history to our session. to his right?
>> well, if we let these tax cuts -- if we increase taxes and lethese tax cuts -- the tax cuts expire, we are in deep trouble. we a going straight into a recession and, you know, you add at to the expense cuts, that would be, ou know, a pretty easy bet. the problem is going to be that we need the republicans need to sit -- stick to their guns on this idea of no rate increases anlet's focus on revenues. gerri: right. >> ultimately what we need is revenues, not great increases. here's the thing, t obamacare, the republicans have already given up rate increases. there is a almost 4 percent tax increase starting january 1, 2013 on interest income. so if i pay 35 percent
income-tax i am going to now pay an additional 38% interest income. if we let the bushtax cus expire if that means that people will be paying over 42 and a half% on interest income. gerri: that means thetock market will plummet like a stone over the coming months. it has already started doing that. do you see broader implications for the stock market and economy? >> yes. the small-business start-ups are down. they will continue to be down. we have fewer ipos now than we had ten years ago. compans just don't want to be public because of all of the regulations. venture capital is down. there is less investment in new businesses. gerri: whose fault is that? whose fault is that?
>> i think the ault s directly on the government because they have added a tremendous amount of insecurity. wh we are talking abot with obamacare, as of 2014, a barrage of provisions, taxes. i mean, what theyaresaying is that they are declaring war on business. this idea that what apple bees is doing is wrong is unbelievable. they have to make a profit. if they can make a profit, they have to reduce thir employment. gerri: you say that will happen with a lot of businesses across the country, presumay here are lots of ways to get -- more an one way to find a solution. what do you think would work at this point to get these two sides together to find some kind of common ground and get the problem solved? >> we aren't trying to do the 4 trlion reduction that the president was talking about at the beginning. taxes are designed to bring in about $39 trillion in ten years,
but we actually bring in about 36 trillion. so $3 trillion of deductions to workwith. we won't get 3 trillion, but we can get a good chunk. i think we will probably end up with something around the order of $1 trillion, whh is a good step frward. it says the right message, but it is so much. we have so much more to do. our deficit is about the same size as t% of gdp is greece. gerri: i know. we are facing problems, hat is for short. i appreciate your coming on tonight. >> always a pleasure. gerri: thank you, secretary perry to have you wnt. thank you so much. meanwhile, congress returned to work tomorrow afte their month-long break. can ey work together to up work and the fiscal cliff. with more, always great to have you. the speaker at a conference call this week with republicans saying get in line because we're going to have to find some
common ground. do yu think that wil woork? >> the problem republicans have, they have the leaders looking at that and saying, we will have to give some on revenue and hopefully as the former secretary was discussing, hold the line on rates. there was that little potentia tea leaf in the president's statement the other day where he did not mention higher rates. so it's possible you could have a compromise around cosing loopholes, closing deductions to my getting more revenue. gerri: is that morelikely? that is intresting is that can happen. >> if they're is a deal that will beit. gerri: and what would you place the odds of having a deal had? >> i'm not betting on anything else ever again. [laughter] gerri: what is interesting, a lot of things are now on the table. just this weekend bill kristol, the republican london, had this to say about how they could find common grund. >> you know what, it won't kill
the country if we raise taxes a little bit on millionaires it really won't. gerri: the president has said raise taxes on people who aren't $250,000 or more, something very different. the think e republicans are sponsoring on this topic? >> first of all, you ave had some democrats saying, actually, let's set it at a million rather than going down to 200. gerri: because he is in new york city were a lot of people make 250,000. >> you are not rich. you don feel rich. and the irony is, you listen to joe biden and barack obama talk about it, and it suds like they're only taxing millionaires and billionaires because their the only peopl they ever invoke, but what billas talking about is more a zessty debate within the right about the sort of things without the debate being shut down automatically at. now, if he's talking about raising rateon millionaires, i think that reall is bad for te tax system. as we were discussing earlier, the parameters of the deal, you will probably get more revenues and will come frm the top.
rri: revenues don't come fro taxing the wealt. you don't get enough revenue to make a difference to the deficit or debt. i want to talk to you about patty murray in th senate he said, was distraught over the fisc cliff. >> we can to accept an unfair deal that tells all of this on the middle-class and tells them they have to support it. we have to make sure that t wealthiest americans pay their fair share. if the republicans wil not agree with that, we will reach a point at the end of this year where all the tax cuts expired and we will start over next year gerri: and she likes that idea. let's just drive over the fiscal cliff. is that an option? >> it is an otion, both politically and economically it will be a mistake because the president learned from the dbt shut down. there is a big car full of congress and no deal and it's all poisonous, he is heard as well as congress. he has to be aware of that. and just the economic efects. we have seen some of the effects
of the uncertaiy now. just imagine going into january with these rates going up. the democrats and he president would try to blame republicans, but it's tricky when you have democrats out tere frontally, likehe senator saying, this is a big part of our levege and it would not be such a bad thing it happened. gerri: i just can't imagine anybody would want to take responsibility for the loss of 2 million obs and another recession. we may already be in recession, anthat is one factor that nobody italking about. we may be driving right into the teeth of a recession and aising taxes at the same time, which could be a very big problem for this economy. >> i would prefer not to raise taxes at all, and i thnk the president's argument from a year or two ago when he backed off from raising the bush rates, you n't want to doit in a fragile economy. that still pplies. gerri: a long way to go. where do you think the republican party needs to it be different of the next four years? >> that is a big question, and i don't have theanswer. my initial reaction is mitt romney lost the argument over
the economy, at least he did not when it. democrats are successful in the populist attack on him. i would like the party to focus on sort of the ead-and-butter economics to hit the middle of the country where they live. i think romney did not ve that agenda, and republicans have not had that agenda, and it bears somehinking about what that agenda would be. gerri: the kitchen table. food on the table and gas in the tank. >> obama had the right rhetoric. the middle class and take home pay, but i'm not sure there were the signature policies to back those words up. gerri: a long way to go and stuff to get through before that happens. it will be interesting to see. thank you for coming on. always great to see you. now we want to know what you think. here is our question. sinn millionaires pay higher taxes? logitech gerriwillis.com, on the right-hand side of the screen and also the results of the end of the show. >> coming up on "the willis report," obamacare is here to stay after surviving the
election. how wiwillimpact the health plan you sign up for this open enrollment season? what you need to know next. a fall from grace for the now former head of the cia david patraeus. taking a new twist. k. t. mcfarland is here with the unbelievable details. and just like in huicanes past, sandy left behind may set up an sand filled cars. the deputy automove editor for consumer enforcement is here with what you should let go for the next time you buy a car. the next time you buy a car. we are on the case next on "the
okay, l-let's stay calm. [ all shouting ] put it down! be cool! everybody, just be cool! does it price better on the side? no, it just looks cooler. the name your price tool, only from progressive. call or ick today. i got you vered. thank you. oh, you're so welcome. ♪ gerri: if you have not alreaady heard from your employer about open enrollment, well, brace yourself. premiums are high, and rising. according to a survey from the national business group on health, employers expect their
health-insurance costs increase 7%. 60ercent of those employers, more than half, pln to ask workerto payigher month premiums. case in point and walmart stores. the arkansas based retailer and naon's largest employer will ask employees to pay premiums that are 8%-36% higher next year for. the compy has said if your average cost of the more than 1 million employees were covered all workers' contributions we will rise just 4%. according to a survey, nationally premier shall rise 9% on average. the walmart workers are getting off easy. lmart says for its pa it is trying to cope with risin medical costs which make up a huge chunk of the retailer cost. the company has gone so far as announcing the opening of six health centers where it will offer free hard and spine surgy to most employees. even so, most employees are restricted to drop coverage because of the higher cost. wal-mart's most popular
associate on the medical plan we will cost $17.40 for two weeks. that's up $2in 2012. average plan costs across the country and all businesses is $79 per month. seen as a blueprint for othr employers who were trying to manage their cost and preparing to meet the requirements of obamacare. health care reforms supposed to keep costs low and quality of care the same or better. >> if you like your health care plan you'll be a will to keep it . gerri: increasingly it is to the industry is changing dramatically. what is ore, the unintended consequences are not good. obamacare was supposed to ensure everyone got covered about keeping costs low, but as you saw, already eloes are saying it will drop out of the company plans, many more people we will burden emergency rooms. as i said,,costs are not
declining. ey're rising. u have to admire walmart for being so creative and evenhanded. thbrass s are offered the same health plan as warhouse workers in cincinnati. the story espouses a obamacare for what it is, a plan without a vision f doing what is needed. obamacare may be the law of the land, but it should be overturned. when we come back, now that obamace is here to stay, what is next wit a maive loss?
♪ gerri: obamacare, taxes, and regulations coming to you soon. here with the manhattan institute, asenior fellow. thank you for coming on. we appreciated. i want to talk about what people can exect coming up on he horizon in the short term cause this all rolls out over several years. what taxes, for example, will people face in the new year? >> in 2013, tod teefourteen is a big bulk of the taxes. 2013, we will start to see the investment tax and a tax on dividend income. gerri: that will have a big impact. >> tt is why the stock market has react. the cost ofapital will be significantly higher, but in 2014 you will start to see their real bulk, the 1 trillion in taxes, the bulk of that will be in 2014 the spending will start kick in as well. so 2014 is the big year. gerri: we start to see it.
we have seen a litte bit all along. we saw keeping your kids and your insurance policy for longer, all that kind of stuff that people really like it happened earlier, but now we're getting to the nitty gritty. now it's the taxes. even now, people on't lik the law. if you look at exit polling on obamacare from the election just last week, the majority of people want obamacare eitr repeal orrollack. the question is, of course, the president won the election. had you do that? >> there is not a way to repeal a law, even if romney had oe, republicans lost two seats in the senate. there's only so much you can do if you have control of congress you can do some things, but not much. there is very limited the amount that you can do. would you can is us the law as, perhaps, an outlet for reforming entitlements. that is oe thing that obamacare, that may be the legacy. this he competion for resources.
the big health care entitlements. republicans will have some say as to how thatlays out. gerri: what you're saying is, it sounds like what you're saying is some of the money could b diverted some morales. >> the irony of a lot of this healthare politics is that democrats criticize paul ryan for the premum support plan for medicare reform. the obamacare exchanges which apply to people who are a low-middle incomalso is a premium support plan. so democrats have an argument against applyg the obamacare racing just medicare? d mean, they like obamacare. what would be so terrible about migrating seniors into the obamacare exchange as a way to reform medicare using a democratic approh. gerri: you're turning the law and set a little bit there. interesting florida, for example , medicare and medicaid. very important. 27 percent of dotors are not accepting medicare patients right now. is that oing to get better or worse? the cost pressure and spdingause presres of medicare, the
politicians have chated when not going to reform the program to me it more efficient. eulost pay doctors and hospitals less to cover this impatience. at a certain point doctors quit and house bills go broke. the medicare actuary says that 15 percent of all hospitals will go broke by the end of the decade because of these cu. 30 percent by 2030. austral's according the program. gerri: that is why the entire industry is restructuring. main, trng to come together. doctors tell me they don't think they can hang out their own shingle anymore because it will be so expensive to be aingle practitioner. >> that's true. what is happening, that is driving of the cost of health care because the reason may sign a prosperous is hospitals can charge higher prices. gerri: something that i thught was very ieresting in telling. obamacare will be the last titlement that this country will ever put forward. hocan you be so short? >> you can never be sure, of course. we are broke. it would be pretty impressive to see a massive expansion again.
health care is really the last major building block of the welfare state. once you have that. gerri: you haveeverything. and, of course, as is so obvious, once you pass a major entitlemenbecause never comes down. all right. thanks for coming on tonight. it's a pleasu to see you. but have you on set. >> my pleasure. gerri: coming up, the fiscal cliff is not the only thing on the president's plate. i looked at foreign-policy. helping our heroesork on this veterans day. we look at the most military friendly employers and what they're doing to help. stay with us. ♪ [ engine revs ] ♪ ♪ [ male announcer the mercedes-benz winter event is back,
president obama foreign policy policy look like? let's ask k.t. mcfarland. we have been focused like a laser thattax problems to hit the country but it is for a policy that is being ignored. >> when the economy is bad ople don't care about foreign policy is hard to get excited about the middle east with no job in the u.s. the big loser is israel. the president has already said he is stepping away. will the united states help them stop by iran? they will do with them as some point*. gerri: how do you do with a country like tat? >> it willdivide it to the point* to have nuclear weapons just once grew turn
away then we would recognize to normalize relations. as a result eithe all those countries start to accommodate and let them be the dominant power to control the pershing goal for they get their own nuclear weapons. gerri: any winners or sers? >> but what is coming our way is the veterans. reset after vietnam we would never do that again but people come home everybody forgets about the bets kravis serious commitment to them that we're alread cutting the mental-health benefits. gerri: now because of the fiscal cliff. >> is easier to cut the guys that cannot strike rather an government workers.
gerri: especially on veterans day. the president made false responding to foreign leaders at san tm a voicemail that said congratulations. look at who the president responded to. it is telling. what does that tell you? we have the enemies centric foreign policy. we have a couple of middle east countries. nothing and africa then there robocalls calls to asian countries. gerri: when people think nobody is looki. >> he also did not call afghanistan and buy-back. we have pl for those countries and those to will be a lost war and we will walk away a.
that is our the administration is going. gerri: talk about petraeus. this was heartbreaking four u.s. >> he is friend. i was in afghanistan right after paula left. gerri: general petraeus head of the cia and the woman whitey -- writing biography he is incredibly well-respected. >> the most honored military leader in a generation. gerri: he resigned? >> he had to. but we're still talking about the 12. general petraeus does know whatappened. we need to haventensified we need an explanation. gerri: wht would you expect ? >> when fox news and broke
the story c was told to and down they issued a statement from petraeus period now aid no one at a time denied assistance to the a. if that is the case, then who did? somebody did. gerri: we have to hear him talk about it. there will be a hearing lar this week cement now he is not testifying. the deputy is now speaking but i think they will get him to testify voluntarily or he will be subpoenaed. gerri: they giv recommend on today. is weekend is a time to pause and remember the sacrifices men and women make for us every day and how difficult life is when they return.
post 9/11 veterans unemployment is percent much higher than 10%. but some employers don't made holliday. the most military friendly employers according to g.i. jobs but the number five. burlington northern santa fe. since 2005 they have hired more than 5,000 veterans. number four popozao and hamilton. one-fourth of the employees are veterans. "mugged" delight. the consulting firof first guidance to returning heroes. number two actively seeking out with a military background 1/6 employees of serve or are a reservist from csx. number one, the company that
recently started to combat the claims initiative to became insurance claims adjuster is -- adjusters. 12% of usaa are veterans. while some say wehave to dive over the fiscal clef what is the main with the impact of superstorm sandy? especially when buying and selling damaged cars. what to look for next. next. the bo use capital one nture miles
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does that make a difference ? look at verizon. it's so much more than the other ones. what if we just changed the format altogether ? isn't that the exact same thing it's pretty ear. still l sticking with verizon. verizon. more 4g lte coverage than all other networks combined. gerri: superstorm sandy hit two weeks ago and the recovery at a snail's pace. more than 70,000 customers still without electricity. why is the gernment entity chosen by the legislatures saying it is as a result of factors beyond its control. there was severe erical damage. that would make sense if they did not face similar criticism from last year another example of thhe
ivate sector doing things better. one official says governor cuomo plans to request $30 billion of federal disaster aid used to cover cost of commuter rail lines and bridges and subways to help rebuild homes and make loans local businesses. a new power gr and a christmas tree a a horse and a new car. the list went on and on. [laughter] why not world peace and leprechauns? apparently he needs to get dose of reality. but they will end the gas rationing as 6:00 a.m.. gas spplies are back to normal and the lines are drawn. but michaellumberg said he is nosure when he will end it in new york he suspects
it will stay emplace for while. and used car prices could go up 3% according to a new report price hikes will be sharp with lury cars. mini buyers may not be aware their purchasing one of these cars. joining me nowjeff, this is a problem after a big storm not just dealership cars but the ones on the secondary market. have you know the car has be damaged? >> the buyers willave to be extra careful and it comes down to a careful inspection. there ae things a consumer to look for but to make sre
it is looked at with an independent mechanic. >> if you see muddy carpet' walk away look for some things that are more subtle like the seat mounting screws? >> if the car has been cleaned it will look good at a glance butt shows a flood damage in the details. the seat 19 screws should look perfect but they were like the removed so look for aside the screwdriver has scratched the paint. also the headlights if dewater water will seek bid and we a water line. gerri: also the engine? >> if you pop the ood you
can often find an indication of dirt or a water ied at the back of theengi. gerri:rest on the screwheads under the dashboard to. >> right. the insider not typically exposed. just like under the negative. gerri: is there a lot to protect me? >> there are. they're not perfect for insurance companies, a juyards', when a car has been some difficulty damaged , th are supposed to report it to to the title information system, a database used for vehicle history reports. gerri: can i kthat status as a consumer? >> you can.
you can be men access the similar compilation called the national insurance crime bureau represents similar but its free. gerri: that works for me. some people find off -- out there better off purchasing new car if they are concerned about the overhang? >> that may be a real option. by used car you have to be very careful. if it is do it has certain protections. we have 30 day prection and the assurance it is new. and has not been through anything tsevere but it should still get a close look. gerri: a big problem after katrina.
the econom suicide. joining me now is brian westbury from first trust advisor is. really? >> exactly. how long have winnod this is coming? it is clear if we go off a cliff letting all the x rates to kick and we will have a recession. >> ien heard 1.3% from gdp and 2 million people could lose their jobs. is it that severe? >> i would not argue with that. itcould be a two or three quarter recession. i think we will adjust and do something but if we don't , it will not be pretty and 2013.
gerri: the jpmorgan chase came out to say that the fiscal cliff could car 1 + 1 + 6000000000000 and also citing capital gains and dividend taxes. will it accelerate? >> if we go off the cliff completely will have 40% dividend tax rate and we could go back up 30% sun capital-gas. this is enough to drive the market down. my best guess is redoubt go over it. gerri: dividend stocks are flavor of the yearar. what is the impact if the tax rates go up and we cannot pollack oneincrease?
>> prequalified dividend to 15% will go up at 39.6 + 3.9% -- %. that is tripling. gerri: wht is te incentive? >> there is not. the cash flow drops. makes treasuries look more enticing. when you raise taxes this much you inluence incentives were investment goes and savings. which is why you end up with a recession if you allow this to happen prick out. gei: we have no talked about the amt that has no patch. the death tax through the roof.
mistake on the left that is all the want to talk about but we see a broad brush of taxes going up to people who care abo their future trying to invest or run a business. >> it is one of the biggt tax hikes in history. it is approaching $400 billion. by the way, it will harm the economy and still will not cut -- cover the deficit. we have to cut spending. i believe the most likely outcome is to kick the can down theoad or one year. cannot compromise they will take the middle road
and we have serious negotiations 013 for the overarching simpson bowles type package. type package. gerri: [ male announcer ] at scottrade, we believe the more you know, the betr you trade. so we have ongog webinars and interactive learning, plus, in-branch seminars at over 500 cations, where our dedicated support teams help you know more so your money can do mor [ rodger ] at scottrade, seven dolr trades are just the start. our teams have the information you want when you need it. it's anothereason more investors are saying... [ all ] i'm with sctrade.
gerri: a frequent guest on this program, bill kristol said yesterday, it won't kill the country if we raise taxes a little bit on millionaires. do you agree? here is with some of you posting on our facebook page. all americans love the bob -- above the poverty line should be taxed at the same rate. unfair to tax in the diary because they are successful. i think everybody should pay the same tax rat as we all pay the same as in sales tax well, ask
the question on gerriwillis.com. 22 percent of you said yes, 77 percent said no. after getting pushed up the door, former ceo is leaving with a ton of money in his pocket. along with former ceo oh, not eligible for severance payments as a result of their departure. stead they're reaching mor than six nap million dollars in incentive awards. incentes for what? staying away? this company got bailed out dear reader a man wholed the bank when it saw its stock price did cut almost in half. the two men bow get 40 percent of thmoneyright away and the rest will be paid in installments. what a way to go. that is my "2 cents more." coming up tomrrow, rebuilding the american dream. take a look at the bumpy ride the housng